Budget passes both chambers: But differences must still be resolved
NASHVILLE — The House and Senate overwhelmingly approved Thursday slightly different versions of a $21.5 billion state budget, cutting spending for most departments and agencies by 9 percent but adding money to K-12 education and health care.
The appropriations bill, approved by the House 88-5 and the Senate 29-1, is among the most important considered each year by the Legislature. It authorizes the expenditure of every state dollar, with the new budget year beginning July 1.
The House approved the bill first on Thursday, then the Senate approved the House version but with three amendments. Those would add $1.5 million in state shared taxes to some cities, $200,000 for Family Resource Centers; and $525,000 to subsidize residential homes for the aged.
The chambers will try to resolve those differences next week and send the bill to Gov. Phil Bredesen.
‘This is a responsible budget — balanced without any tax increase or new taxes,’ said Majority Leader Kim McMillan, who sponsored the bill. ‘Most importantly, it balances recurring expenses to recurring revenues for first time in several years.’
In recent years, lawmakers have used one-time funds to pay for continuing needs and other fiscally questionable tactics to make the books balance. Last year, lawmakers balanced the budget and paid for past transgressions with a $933 million tax increase, the biggest in state history.
Bredesen praised the bipartisan cooperation among lawmakers and the administration in dealing forthrightly with the state’s difficult financial situation. Much of what the governor proposed in his budget was signed off on by both chambers.
‘This budget is exactly what I wanted to have,’ the governor said. ‘It’s a straightforward budget that matches the revenues to the outgo just like any family has to do.’
The budget increases K-12 education spending by $111 million, including what Bredesen describes as a $27.6 million ‘down payment’ to equalize teacher salaries between the richest and poorest districts to comply with a state Supreme Court order.
‘Obviously the thing I’m most proud of, after having put together a budget that doesn’t have funny money in it, is that we were able after some very tough years to preserve K-12 funding and to increase it,’ Bredesen said.
The budget also increases spending for TennCare — the public-funded health program for the poor, disabled and uninsured — to $7 billion.
‘The budget is bigger than last year’s by nearly a billion dollars, and it’s irresponsible to give TennCare $350 million in new taxpayer money without any reforms,’ said Rep. Jerome Cochran, R-Elizabethton, who opposed the bill.
The Senate tried to write its frustration over TennCare into the budget, considering several amendments regarding the agency. All were defeated, despite broad expressions of annoyance, to give the governor another year to fulfill his promise to reform the program.
‘We’re in such a delicate condition right now with TennCare that I really had to jiggle it,’ said Sen. Douglas Henry, the Senate’s finance chairman. ‘I really think we would be a lot better off if we let this man who’s made his fortune in the health care business have at least a little chance to set it straight.’
The budget for next fiscal year is larger than the proposed budget for the current year, but is only $5 million more than is actually being spent this year.
Lawmakers had to resolve a combined $1 billion in shortages to the current and next year’s budgets through cuts and a shifting of spending priorities.
Higher education took one of the largest hits — $102 million — while $66 million of state road money will be used to cover general expenses.
The amount of tax revenue shared with cities and counties also was reduced by nearly $37 million. Bredesen originally proposed a $60.7 million cut, but lawmakers lowered that amount to ease the blow to local governments through a variety of maneuvers.
Passage of the legislation puts the General Assembly a giant step closer to wrapping up for the year. Lawmakers had hoped to finish their business this week, but decided instead to return after the Memorial Day holiday and complete the session.
Both houses already have passed slightly different versions of an essential companion to the appropriation bill, called the Omnibus Law Bill, which allows Bredesen to cut and shift funds to balance the budget this year and next year. The two houses appear close to agreement on that bill as well.
Adjournment in May would be the earliest in five years. Legislative sessions have stretched into June and later the past four years as lawmakers and the previous administration struggled with tax and budget issues. Last July, state government was partially shut down before a budget was approved July 4. Two years ago the Legislature returned in August to override a budget veto.
Thursday’s votes on the budget bill came on the one-year anniversary of the House’s failed vote on a state income tax.
Details of budget appropriation bills
NASHVILLE, Tenn. (AP) — Gov. Phil Bredesen’s $21.5 billion budget was approved Thursday by the House and Senate but in slightly different versions.
Here are the key points contained in both bills:
— No new taxes or tax increases.
— Spending cuts of 9 percent to most state departments and agencies. Higher education takes the biggest hit: a $102 million reduction.
— Transfer of $66 million in road money to the general fund.
— Reduction of nearly $37 million in the amount of tax revenue shared with local governments.
— An additional $111 million for K-12 education, including $27.6 million to improve salaries of the lowest paid teachers.
— Another $350 million for TennCare.
— A $132 million decrease in the amount of state money that will be spent, the first time that’s happened in 30 years.
— An entire budget increase, including federal and other funds, of only $5 million over the current year’s spending.
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Associated Press writers Amber McDowell and Karin Miller contributed to the story.
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On the Net:
Tennessee General Assembly, www.legislature.state.tn.us